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Old January 7th 10, 06:09 PM posted to microsoft.public.excel.misc
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First recorded activity by ExcelBanter: Oct 2009
Posts: 905
Default Help with tax formula for marginal tax rates

PS....

I wrote:
"מיכאל (מיקי) אבידן" <micky-a*at*tapuz.co.il wrote previously:
http://img85.imageshack.us/img85/6707/nonameqh.png


Which now looks suspiciously like one of the solutions that I presented in
this thread two days ago, complete with relying on a row with 0%.


Actually, your table is different in design: it is limited to incomes of
less than $10 million, whereas mine is not. Not a big limitation,
admittedly; but an unnecessary one.


There is nothing wrong with Bob's approach [...] it is indeed the
most efficient formulation, I believe.


I meant the most efficient formulation presented so far in this thread.

Some years ago, I was posting a formula using MAX. I suspect it is more
efficient, although I am not taking the time to test the theory. I still
use the MAX formula sometimes for quick-and-dirty implementations. But I
have adopted a table-driven design for responses because I believe it is
less error-prone and easier to maintain (change from year to year). It is
certainly easier to remember ;-).


----- original message -----

"Joe User" <joeu2004 wrote in message
...
I've been watching this part of the discussion, and it reminded me of
dialog between Dumb and Dumber (before Bob jumped in). I held my tongue
because everyone is entitled to post their opinions, no matter how
misguided they might.


"מיכאל (מיקי) אבידן" <micky-a*at*tapuz.co.il wrote:
Well..., for a salary of $ 50,000:
My formula returns: $ 8,687.50 and yours: $ 8,132.50


You are correct: $8687.50 is the right answer.

But you don't need to throw out the baby with the bath water. You might
have simply noted that Bob had written 8950 and 39500 instead of 8350 and
33950.


"מיכאל (מיקי) אבידן" <micky-a*at*tapuz.co.il wrote previously:
By using your suggestion in a different approach all mistakes and
"extra
work" that can be eliminated.
http://img85.imageshack.us/img85/6707/nonameqh.png


Which now looks suspiciously like one of the solutions that I presented in
this thread two days ago, complete with relying on a row with 0%.


Bob wrote:
I was responding to your
you where you showed a formula using INDIRECT, which is awful


You (Micky) fail to acknowledge the point that Bob is trying to educate
you about, namely: INDIRECT is a volatile function, which carries a huge
cost in terms of worksheet preformance. Your first solution at
http://img691.imageshack.us/img691/622/nonamecz.png was indeed unduly
cumbersome and complicated.


Micky wrote previously:
with your permission I have ONE important comment.
It is not a good idea to type all the various "values of steps"
WITHIN the formula.


There is nothing wrong with Bob's approach. For my money, it is
error-prone, and it contains "simplifications" that deserved explanation;
but it is indeed the most efficient formulation, I believe. I can see why
it might have been a complete mystery to you, given that you did not even
know how US marginal tax rate tables work just 2 days ago.

I, for one, am getting sick and tired of your misguided sermonizing. It
reflects badly on you more than on the people you try to criticize. But
if you are going to berate people publicly, you should be a mensh and
admit your own mistakes publicly and up-front.

And do follow your own advice, misguided as it might have been in the
original context, namely:

``I would dare to say that 30-40% of the replies are Superfluous. I think
it will be a good idea that every supporter will adopt the "habit" of
pressing [F5] BEFORE(!) replying.``

[From: "מיכאל (מיקי) אבידן" <micky-a*at*tapuz.co.il, Newsgroups:
microsoft.public.excel.misc, Sent: Thursday, December 31, 2009 10:35 AM,
Subject: excel decimal rounding down all numbers.]


----- original message -----

"מיכאל (מיקי) אבידן" <micky-a*at*tapuz.co.il wrote in message
...
Well..., for a salary of $ 50,000:
My formula returns: $ 8,687.50 and yours: $ 8,132.50
Would you be so kind to calculate the Income Tax step by step...?
Micky


"Bob Phillips" wrote:

Micky,

I agree that if the formula is used on many people a table would be the
way
to go, on a single item, debatable.

However I just offered a solution, and it worked. I was responding to
your
you where you showed a formula using INDIRECT, which is awful, and
should be
avoided at all costs IMO. My solution worked, no INDIRECT, in one cell,
not
cumbersome ... as I said.

Typos? I tested it and it seemed fine to me.

---
HTH

Bob Phillips

"????? (????) ?????" <micky-a*at*tapuz.co.il wrote in message
...
Bob,
If I may - this was one of the "brainstorming" thread I participated
in
during the last couple of weeks.
Your formula is, as you stated, "Not large, not cumbersome, and all
in one cell" - however, with your permission I have ONE important
comment.
It is not a good idea to type all the various "values of steps" WITHIN
the
formula.
If you'll take a close look - it seems that you have had more than one
TYPO
in what you presented.
In addition - whenever one needs to change one, or more, values - he
would
have to edit the formula and copy it along the Salaries.
By using your suggestion in a different approach all mistakes and
"extra
work" that can be eliminated.
http://img85.imageshack.us/img85/6707/nonameqh.png
Thank you,
Micky


"Bob Phillips" wrote:

Which is exactly what my formula gives, not large, not cumbersome,
and
all
in one cell.


---
HTH

Bob Phillips

"rzink" wrote in message
...
MZ,

I interpreted your question a bit dirrently than Stefi. Coming
from an
accounting background, I understand your question to be, "what is
the
income
tax based on the taxable income entered into D36?"

First of all, you are correct in your title asking for the
"marginal"
income
tax, but this is a bit more complex than simply multiplying your
taxable
income by the tax bracket.

For example: If a person has $50K of taxable income, the tax rate
on
the
first $8,349 is 10% ($835), the rate on the next $25,600 is 15%
($3,840),
and
the rate on the ramaining $16,051 is 25% ($4,013). If you add up
the
individual tax calculation, the total tax is $8,688 or an overall
tax
rate
of
17.4%.

This can be done with a series of calculations set up as a table,
but
you
will end up with a very large and cumbersome formula if you try to
put
it
all
in one cell.

rzink

"MZ" wrote:

I am trying to make a single formula that will calculate a
person's
taxable
income assuming the six different marginal tax rates that range
from
10%
to
35%, as income increases

For a single taxpayer, the marginal tax rates and the associated
income
amounts a

10% up to $8,350
15% up to $33,950
25% up to $82,250
28% up to $171,550
33% up to $372,950
35% over $372,950


I am using "IF" statements to test for each marginal tax rate.
I began the formula as follows, but it returns a value error.

Cell D36 is the taxpayer's income

=IF(D36<=8350,D36/10),IF(AND(D368350,D36<=D31),SUM(D36/10,D36/6.666))

Also, is the only way to multiply by a percentage to make a
fraction
with
the denominator the value of the percentage - e.g. 6.666 is 15%?

Thank you
--
MZ


.



.




  #22   Report Post  
Old January 8th 10, 02:02 PM posted to microsoft.public.excel.misc
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First recorded activity by ExcelBanter: Jul 2006
Posts: 2,646
Default Help with tax formula for marginal tax rates

I'm wondering what an active dispute is in process while the OP didn't
respond at all!
--
Regards!
Stefi



„MZ” ezt *rta:

I am trying to make a single formula that will calculate a person's taxable
income assuming the six different marginal tax rates that range from 10% to
35%, as income increases

For a single taxpayer, the marginal tax rates and the associated income
amounts a

10% up to $8,350
15% up to $33,950
25% up to $82,250
28% up to $171,550
33% up to $372,950
35% over $372,950


I am using "IF" statements to test for each marginal tax rate.
I began the formula as follows, but it returns a value error.

Cell D36 is the taxpayer's income

=IF(D36<=8350,D36/10),IF(AND(D368350,D36<=D31),SUM(D36/10,D36/6.666))

Also, is the only way to multiply by a percentage to make a fraction with
the denominator the value of the percentage - e.g. 6.666 is 15%?

Thank you
--
MZ



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